Deliveroo raises nearly $500 million ahead of 200th city launch

LONDON (Reuters) - British food delivery company Deliveroo has raised an additional $98 million (£74 million) from private investors, bringing its fundraising to almost $500 million just before launching in its 200th city in Cannes next week.

FILE PHOTO: A cyclist rides a bicyle as he delivers food for Deliveroo, an example of the emergence of what is known as the 'gig economy', in Paris, France, April 7, 2017. REUTERS/Charles Platiau/File Photo

The company, known for its green and white kangaroo logo, previously raised $385 million from investors led by T.Rowe price Associates and Fidelity Management and Research.

The funding, which values the tech firm at more than $2 billion, will primarily be used to grow its Editions programme of delivery-only kitchens that allow partner restaurants to expand without upfront costs facing traditional restaurants, such as rent and staff.

The financing also aims to help the firm, which competes against publicly traded rivals Delivery Hero (DHER.DE) and Just Eat (JE.L), expand its technology team and grow in new cities and countries, such as Cannes in France where it starts operating on Tuesday.

Besides Britain, where it operates in 60 cities and towns, it offers food delivery in eight European countries, Australia, Hong Kong and the United Arab Emirates.

Deliveroo said its expansion would benefit the British economy where it would provide more well-paid and flexible work for riders and would help to generate substantial extra revenues for its restaurant partners.

Earlier this month, a UK tribunal ruled that its 15,000 couriers were self-employed, confirming its stance against some unions and lawmakers which had criticised the tech firm for not granting its riders employment rights such as the minimum wage.

The firm has always maintained that the vast majority of its couriers enjoy flexible working in what is dubbed the “gig economy”.